Report Title:
Procurement; Audit; Contract Changes
Description:
Requires the office of the auditor's compliance audit unit to audit any contract modification, change order, or price adjustment of any contract that is $5,000,000 or more; provided that the modification, change order, or price adjustment is equal to or greater than fifteen per cent of the original contract amount.
THE SENATE |
S.B. NO. |
2104 |
TWENTY-SECOND LEGISLATURE, 2004 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO PROCUREMENT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 103D-326, Hawaii Revised Statutes, is amended to read as follows:
"[[]§103D-326[]] Fiscal responsibility[.]; audit required. (a) Every contract modification, change order, or contract price adjustment under a contract shall be subject to prior written certification by the appropriate fiscal officer for funding the project or the contract, as to the effect of the contract modification, change order, or adjustment in contract price on the total project budget or the total contract budget. In the event that the certification of the fiscal officer discloses a resulting increase in the total project budget or the total contract budget, the procurement officer shall not execute or make such contract modification, change order, or adjustment in contract price unless sufficient funds are available therefor[,] or the scope of the project or contract is adjusted so as to permit the degree of completion that is feasible within the total project budget or total contract budget, as it existed prior to the contract modification, change order, or adjustment in contract price under consideration; provided[,] that with respect to the validity, as to the contractor, of any executed contract modification, change order, or adjustment in contract price which the contractor has reasonably relied upon, it shall be presumed that there has been compliance with this section.
(b) Notwithstanding any other law to the contrary, if the consideration for a contract exceeds $5,000,000 and requires a contract modification, change order, or adjustment that is equal to or greater than fifteen per cent of the original contract amount, an audit of the contract shall be conducted by the compliance audit unit to ensure that abuse, waste, fraud, or mismanagement is not the basis for the contract modification, change order, or adjustment. If abuse, waste, fraud, or mismanagement is uncovered by the audit, the policy board shall take appropriate remedial steps as provided by this chapter. The cost of the audit, as estimated by the office of the auditor, shall be paid by the contractor."
SECTION 2. Section 103D-108, Hawaii Revised Statutes, is amended to read as follows:
"§103D-108 Compliance audit unit; duties and responsibilities. The compliance audit unit shall:
(1) Review and assess applicable innovations in procurement methods or processes in other governmental jurisdictions or as described in national or regional publications;
(2) Review current or proposed statutes and rules to determine whether they promote fairness, efficiency, and accountability in the procurement process;
(3) Review selected contracts awarded pursuant to section 103D-304;
(4) Conduct studies, research, and analyses, and make reports and recommendations with respect to existing and new methods of procurement and other matters within the jurisdiction of the policy board;
(5) Establish and maintain a procurement library;
(6) Report to the appropriate agency and the chief procurement officer stating the areas of noncompliance and recommendations for remedial action; [and]
(7) Conduct audits pursuant to section 103D-326; and
[(7)] (8) Be present at legislative hearings and policy board meetings to present the findings of the unit."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
INTRODUCED BY: |
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